Intraday Market Analysis – GBP Struggles For Support - 05.11.2021

Intraday Market Analysis – GBP Struggles For Support - 05.11.2021

GBPUSD tests key floor

Intraday Market Analysis – GBP Struggles For Support - 05.11.2021 - 1

The pound plummeted after the Bank of England held interest rates against expectations.

The plunge below the daily support at 1.3570 has caught buyers off guard. Those who bet on a rebound around 1.3600 have rushed to the exit, raising volatility in the process. The September low at 1.3430 would be the next target.

An oversold RSI may attract some buying interest, though buyers might be cautious to avoid catching a falling knife. The supply zone between 1.3640 and 1.3700 could keep the sterling under pressure.

USDJPY consolidates gains

Intraday Market Analysis – GBP Struggles For Support - 05.11.2021 - 2

The US dollar consolidates recent gains as traders digest the start of the Fed’s taper.

The pair is seeking support around the 20-day moving average after a parabolic rise sent it to a four-year high. An overbought RSI from the daily chart is a sign of exhaustion and traders may be reluctant to push higher.

The greenback has found bids along the demand zone over 113.30. The bulls need to clear the fresh hurdle at 114.45 before they could resume the uptrend. A bearish breakout would trigger a sell-off towards 112.50.

US 500 grinds to new highs

Intraday Market Analysis – GBP Struggles For Support - 05.11.2021 - 3

The S&P 500 continues to climb as the Fed deliberately leaves rate hikes off the table. The rally has gained momentum after the index cleared the previous peak at 4550.

Sentiment remains bullish, but an overbought RSI in the daily timeframe may call for a pause. Overextension is also on the hourly chart as the RSI repeatedly ventures above 70.

The bulls are pushing towards the psychological level of 47004620 on the 30-hour moving averages may attract trend followers’ bids in case of a pullback.

John Benjamin

John Benjamin

John Benjamin is a Macro-Analyst at Orbex. John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.